The incumbents world wide are facing a difficult time, according to research firms, Gartner and In-Stat. They are caught between a rock and a hard place. A whole generation is leaving behind wireline voice and switching to a wireless only lifestyle. On the other hand, VoIP is having a deflationary effect on prices, and is siphoning off dollars from the wireline revenues.
In-Stat predicts that the US wireline revenues are going to decline 3.3% annually up through 2009, and even the broadband sales may not be enough to make up for the losses in the consumer wireline voice revenues. “Voice services, which have experienced persistent pressure from wireless alternatives, are increasingly being challenged by VoIP solutions,” says David Lemelin, In-Stat analyst.
I am not sure, if entirely agree with these conclusions, because right now Bells are selling low-cost plans. They can increase prices, which they might when they have premium speed offerings. There is enough evidence that the consumers are happy to happy for higher speeds. And with the most recent wave of consolidation in the US service provider industry, the Bells will come out even, because of their wireless holdings.
The big x-factor in this whole equation is cable – which is doing a good job of their triple play offerings. Of course, they never complain about Skype and other VoIP plays, because ultimately those offerings siphon off voice dollars from the Bells, and also attract customers to their higher capacity (and higher margin) broadband access offerings.